Co-operative Bank of Kenya plans to acquire 100 percent stake in struggling Jamii Bora Bank on the back of consolidation plans, media reports said.
The acquisition will strengthen Co-operative Bank’s asset base to more than Sh 462 billion. With that, it will be a close competitor to NCBA Bank.
Co-operative Bank will be the latest to acquire small lenders in the country. The bank said in a statement, “The acquisition will strengthen both institutions leveraging on their respective well established domestic and regional corporate public sector, retail business and the 15 million-member co-operative movement.”
Its board of directors have a positive outlook for acquisition of Jamii Bora Bank. It is reported that the deal would increase the number of acquisitions in the Kenyan banking sector. In the recent past, National Bank of Kenya was acquired by KCB Group.
The Central Bank of Kenya was in favour of the acquisition stating that it will boost the country’s banking sector. However, the proposed acquisition is subject to regulatory approvals, including from the Capital Markets Authority. This is because Co-operative Bank is listed on the Nairobi Securities Exchange.
Last year, Commercial Bank of Africa (CBA) had shown significant interest in acquiring Jamii Bora Bank, media reports said.
Co-operative Bank was ranked four by market share among 39 banks. It had a market share of 9.63 percent put behind KCB Group, Equity Bank and NCBA Bank. It is one of Sub-Saharan Africa’s nine largest banks with an asset base of more than 450 billion.
The Central Bank of Kenya has been driving mergers and acquisitions in the country — a move beneficial to the economy.